Indian banks inadequately prepared for cyber attacks: Experts

• Cybersecurity experts questioned the preparedness of the Indian banks in case of a massive security breach involving funds, stressing that state-of-the-art security systems are the need of the hour.

• Hackers siphoned off a whopping Rs 94.42 crore from the Pune-headquartered Cosmos Cooperative Bank Ltd –the second oldest and second biggest cooperating bank in India – to foreign and domestic bank accounts.

• Robust security systems and incidence response capabilities are imperative for all companies and financial institutions that are custodians of customer data and customer assets, including funds.

• While there is growing awareness to regularly update an organisation’s cyber preparedness and defence mechanisms, a large number of institutions wake up to this reality only post an incident which often leads to a loss of reputation and financial misappropriation.

• In 2016, a malware-related security breach was reportedly detected in the non-SBI ATM network, following which the public sector lender blocked around six lakh debit cards.

• An estimated 30 lakh plus debit cards issued by various public or private banks were exposed to a potential risk of data breach.

• Cyber attacks today are multi-pronged and can start with a malware being downloaded into a system or via a web application being hacked.

• This is a big challenge for banks, where it is no longer sufficient to protect just its data centres and headquarters. It has to protect ATMs and branch offices in addition to securing incoming data even from affiliated organizations.

• In the case of Cosmos Bank, a proxy switch was created and all the fraudulent payment approvals were passed through the proxy switching system. Normally, the Core Banking System receives debit card payment requests via its ‘Switching System’.

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